The launch of Saudi’s vision 2030, by Mohamed Bin Salman (aka MBS), is a major milestone in the looming Saudi monarchy’s generational transition. Since its founding, Saudi has been ruled by the sons of the founding King Abdul Aziz. It is likely that King Salman will be the last of the brothers to rule the Kingdom; however, the transition to the next generation is highly contested and dangerous.

During his first day, King Salman consolidated power in the hands of his favorite son, MBS; from the military to the economy, to Saudi’s crown jewel: Aramco. MBS did not waste time to show his power and vision. He launched a war in Yemen to project military power, and started acting as a visionary leader who is laying forward the vision and plan for the future of Saudi. However, his path to the monarchy is lined-up with a number of major challenges, as he is shaking the foundations of the Saudi monarchy:

Since its establishment, the alliance between Al-Saud and the Wahabis has been the corner stone of the monarchy. Wahabi thinking and institutions control the legal, educational, and public spheres, and provide legitimacy to the royal family. Last week, Saudi reduced the power of the Committee for the Promotion of Virtue and the Prevention of Vice, aka the motaw3a; the quasi-governmental religious organization tasked with policing morals and behaviors of citizens in public. The motaw3a are no longer entitled to stop, question or arrest people in public, which means losing their power in the streets. This organization is one of the tools the monarchy has historically used to assert its power and control. Some of the Wahabi leaders have already started complaining and one of them got arrested for a tweet! This move signals a fracture in this historical alliance. Would the Monarchy lose the support of the Wahabi leaders? Could it survive without their support?

Last month, MBS attracted international attention when he first mentioned the possibility of a partial privatization of Aramco. Saudi oil revenues (2015) are estimated at $340 Billion, 45% of the Kingdom’s $750 Billion GDP and 80% of its government budget. Aramco controls Saudi oil reserves (18% of global reserves) and its production and revenues. The company’s financials are considered a state secret that is highly guarded by the monarchy. Today, Aramco is under the direct control of MBS, and its revenues do not flow directly through the Ministry of Finance. As a traditional monarchy, Saudi does not have a clear separation between the King’s/royal family’s finances and the state finances. Members of the royal family receive substantial “entitlements,” that are typically financed from oil revenues. Privatizing (up to 5%) of Aramco, as the young prince has mentioned, will create transparency into the company’s financials, and will expose and threaten the royal family’s interests. It is not clear if he will be allowed to proceed with this plan.

Internally, Saudi is undergoing rapid demographic change. With one of the highest birth rates in the world, and a strong welfare system financed by oil revenues, the country is experiencing a rapid increase in population and a youth bulge. Many of the young Saudis are foreign-educated in the US and Europe and have aspirations for a more open and liberal society; however, they remain a minority. The majority of the youth are locally educated in a religious educational system (50-60% of the curricula in public schools are religious subjects) that is highly conservative and based on Wahabi values. Most of them enjoy well-paying government or public sector jobs and remain unemployable in competitive private sector jobs. Moreover, the Saudi society remains highly tribal in nature, with tribal loyalties controlling political alliances. It is not clear how the growing young generation and the tribal dimension will play out during the transition phase.

The Saudi political model is based on a “rentier state” – a state that derives the majority of its revenues from natural resources (as opposed to taxation of economic activities), and hence the political class is not dependent on “tax payers”, but rather derives its power from controlling and distributing some of this wealth to its citizens in exchange for their political acquiescence. In his vision 2030, MBS emphasized the need to transition from dependency on oil revenues to new sources of revenues based on investments and taxation. If he manages to successfully create the new Saudi sovereign wealth fund and to generate sizable income that would substitute for the oil revenues, then Saudi may be able to maintain the rentier state model, at least partially over the short/medium term. However, introducing new taxes and fees, lowering public services and reducing public sector jobs is likely to challenge this model and to create to a large base of disgruntled youth, who will see their standards of living decline sharply with limited skills to find good jobs. It is not clear that the Saudi regime can survive beyond the current rentier state model; and it is not clear either how long their finances can allow them to maintain this model given the shrinking oil revenues.

Since the 1950’s, the US-Saudi alliance has been the corner stone of Saudi security. Saudis ensured the flow of oil to the West, and the US provided security and protection to the Monarchy. This alliance survived the 1973 oil embargo, the 9/11 attacks and several other crises. However, recently, this alliance has been challenged by both Saudi and the Obama administration. The US dependence on oil is declining and hence the need for a strategic relationship with Saudi. Also the US pivot to restore relationships with Iran has created fear in Riyadh. Under MBS guidance, Saudi foreign policies changed from slow, passive and discrete to being more regionally assertive. Saudis launched a war in Yemen to stop the country from falling into the hands of Shia; fueled ad armed the insurgency against Bashar in Syria; and supported the new regime in Egypt, especially on the military armament side. Downgrading the US-Saudi relations is likely to create more dependence on regional allies, like Egypt and Pakistan, for security. Over the next 5 years, the US is likely to broker a “cold peace” arrangement between Iran and Saudi (as Obama mentioned last week) with new security arrangement and redrawing the map of the Levant. It is not clear who the winners and losers are in this new regime; however, it is likely that the historical strategic relationship between the two countries will no longer remain the same.

Navigating these changes ushers a fundamental change in the foundations of the Saudi monarchy: from the domestic alliance with the Wahabis to the global alliance with the US; with challenges to the rentier state model, a hard-to-employ youth bulge and fractures within the royal family.

During the next few months, MBS will have to create a path to the monarchy, which implies either becoming the crown prince, replacing Muhammad Bin Nayef, or even managing a direct transition to the throne during the life of his father. This is a risky transition given all the above factors. Over the past decades, the region had a number of similar father-son transitions that we can learn from, specifically relevant are the transitions of King Abdullah of Jordan and Gamal Mubarak in Egypt. In the case of Jordan, another monarchy, the late King Hussein replaced his brother with his son during his own reign. King Hussein’s strong legacy and control of the country’s institutions allowed for a smooth and unchallenged transition. It is not clear if this will be the case in Saudi with the more complex tribal and royal family politics. However, the safer option would be to time the transition during the King’s life, i.e. as soon as possible.

In the case of Egypt, the Gamal Mubarak transition introduced highly-unpopular neo-liberal economic policies and challenged the power of traditional military and bureaucratic institutions. He tried to do this under the reign of his father for more than 8 years; however, he failed in creating enough popular and institutional support for his project, which eventually led to his demise. The failure of the Gamal Mubarak transition came from popular opposition, mostly to the economic policies and closing of the political space, but more importantly from the opposition of the military institution to the change of the 1952 political regime. Many of the elements of the Gamal project are present in the MBS vision 2030 program, and he is likely to face similar challenges.

Listening to MBS on his televised interview on Al-Arabiya (25 April 2016), it is obvious that he is well advised on the economic transition program by top management consultants; however, it is not clear if he has access to similarly wise advice on the political side. He needs to consider the creation of institutional and tribal alliances that would help him during the transition stage. So far, this is not clear in his narrative – a sign of high risk.

The coming months are going to be critical to the Saudi future, as well as the region’s. MBS is undertaking a very risky transition. His transformation program is upsetting all the foundations of the Saudi monarchy. The region would benefit from an orderly transition of power in Saudi, along with a transition to a more modern state (eventually evolving into a constitutional monarchy), moving beyond the traditional fundamentalist Wahabi values and the conservative regional politics and security arrangements; however, analysis of the current situation reveals a risky transition project, whose failure may lead into a more conservative and oppressive regime.

Few days ago, Saudi planes, along with “a coalition of the willing” started bombing Yemen, after the Hawthi’s militias where closing on Aden, the commercial capital and the old capital of the southern Yemen. The complexity of the Yemeni tribal and sectarian mosaic made it hard for most analysts to catchup with the news and to make meaningful meaning from the unusual Saudi actions.

The Hawthi’s militias are weak, despite their rapid expansion. However, suddenly everyone woke up to the Hawthi’s controlling Sanaa, the capital, with some 20,000 fighters. While the (allegedly) 500,000 soldier Yemeni army all but disappeared. This fact remained a puzzle until last week when it became apparent that the former Yemeni President Ali Abdallah Saleh allied himself with the Hawthi’s, and is using them as a tool to regain control over Yemen. Most of the Yemeni army units remained under his control and are now allied with the Howthi’s. The reality is that the Hawthi’s are a Trojan horse for Saleh to regain power.

The second element is Iran. Now that they are about to cut a deal with the West, which would include letting go of their nuclear weapons project in exchange for normalization of relations with the west, Iran is playing all its cards to strengthen its negotiating position, and also to establish the “truth line” after the deal. They are controlling most of Iraq, Syria and Lebanon. Yemen is the remaining Shiaa stronghold in the region that they want to control. Saleh proved to be a mercenary – selling his life long allegiance to the Saudis to the Iranian in exchange for power (rumors that he offered the Saudis to get back to their side in exchange for putting his son in power).

What happened last week is that the Hawthi’s, along with Saleh were close to controlling most of Yemen. If the complete control of Yemen falls to a pro-Iranian Shiaa regime, with the full Yemeni army intact, this would create a real threat to Saudi. The regions north of Yemen, Jazan and Abha, have substantial Yemeni populations, many of their roots extend to the same regions of the Hawthi’s. It is very easy for a new unfriendly Yemen to have territorial claims to these regions, and to create a serious threat to Saudi.

The Saudi choice was to engage early. First, to destroy most of the capabilities of the Yemeni army through concentrated air strikes. The goal is that whatever is left of the Yemeni army will have limited capacity to threaten the southern Saudi borders. Second, to try to stop the Hawthi’s progress towards Aden, and possibly to stabilize the country into two competing regimes (which was the case prior to the unification of Yemen). Third, to prevent weapon and logistical support from Iran. News that Iran started flying 28 daily civilian flights between Tehran and Sanaa last week, after the Hawthi’s control of Sanaa airport. Not sure who would be traveling on 28 daily flights between the two countries!

The big question is whether the Saudis would escalate this war into a land battle. Yemen is known to be a tough country to control; the people are heavily armed, especially in the north, and the terrain is rough. The best the Saudis can do is to protect Aden and the south to maintain a friendly regime there, and to protect their southern borders. Anything beyond that would be a serious adventure with bad consequences. The Egyptians tried it in the 1960s and paid a hefty price.

The Saudi army is not battle tested, and a big part of it is composed of Pakistani and other nationalities, rather than Saudi nationals! It is not clear how it will perform through an extended ground battle.

The other dimension that is not clear is the internal Saudi family politics and how it relates to this conflict. The new minister of defense, mohamed bin Salman, is the 30 years old son of the new King. Many speculate that the new king is likely to remove his half brother, crown prince Muqren, and replace him with a Sudeiri. This could be the King’s brother, Ahmed, or the next in line mohamed Ibn Nayef, or, one of his own sons. It is not clear how this military campaign may relate to thermal family politics, but it may end up strengthening the king’s son’s position.

If Saudi, for whatever reason, decides to have a full ground invasion to Yemen, this will likely be a historical mistake that may end in a big disaster.

What is interesting to observe is the Egyptian position. Egypt has supported the Saudi campaign in full force; however, it is unlikely that egypt would engage in a ground war in Yemen for many reasons. First, the current government in egypt has stayed away from getting deeper into the Libyan conflict, despite the immediate security risks coming through Egypt’s western borders. When 21 Egyptian citizens were beheaded in a barbaric scene that traumatized the whole country, the army acted in swift air strikes against select terrorist camps. However, the government resisted the temptation of getting involved beyond these air strikes. They preferred to act through allies and proxies in eastern Libya, rather than getting caught in a guerrilla war. It is likely that they would take a similar posture in the Yemeni conflict. They may join a Saudi air and sea campaign to show solidarity; and they may commit to defending the Saudi borders from any external attacks; but it is unlikely that they would engage in a ground invasion against the Houthi’s.

Another important question is how the Saudi entanglement on their southern front will affect their campaigns on the northern front. For several years, Saudi (along with Qatar and turkey) have been arming the anti-Assad militias. These militias turned into Isis, as well as many factions that are fighting the Syrian regime. The strong Saudi meddling in Syria and Iraq resulted in the quagmire that we see today (although it is unfair to blame them solely for this mess; many others share the responsibility). Today, as the American attention move towards Isis, as the worse enemy than Asad; and as they sign a deal with the Iranian, it is unlikely that the Saudis will have the free hand to support the Sunni factions in the levant, which would strengthen the Shiaa regimes in both Iraq and Syria, and pause a stronger threat to the Saudis from the north.

As it seems today, Iran will come out of this deal/battle in a very strong strategic position. The Saudis will be contained to say the least (it is unlikely that their direct territory is threatened, due to American protection; however, their dependence on American (and Egyptian and Pakistani) protection will be heightened. And their ability to maneuver will be constrained.

Like this:

News from Cairo and the neighborhood are puzzling: elections delayed; a quick trip to Riyadh by both Sisi and Erdogan; large weapon deals by Egypt; Yemen collapsing into civil war; Isis fiasco; Iranian American negotiations making progress despite Israeli opposition, and many other news. Trying to understand the complex dance that is taking place in our part of the world is not straightforward.

There are two competing games taking place:

First is the Sunni-Shiite game. Saudi is trying to assemble an anti Shiite coalition that includes Egypt, Turkey and the GCC. The Iranian threat is happening on three fronts. In Yemen, Iran’s threat is growing after the Hawthi’s near take over of Yemen, and a looming civil war that may overflow to Saudi, or at least threaten its southern borders. In Syria, Bashar succeeded in stabilizing the situation and is not likely to go away. ISIS is also creating an ideological challenge for the Saudi’s on who is more fundamentalist! Finally, Iran and the U.S. are on the brink of an agreement that will leave Iran as a threshold nuclear state, which will change the strategic balance in the Arab/Persian gulf.

To assemble this coalition and also face the ISIS threat, Saudi needs Egypt and Turkey to be on the same side of the Sunni coalition, which leads to the second game: the political Islam game. what to do with the Muslim Brotherhood Islamist project? Turkey, along with Qatar and the U.S. Strongly favor integrating the MB (aka in DC as moderate political Islam) in the political process. Egypt, the UAE (and Algeria) were the hard liners who strongly resisted this, and saw them as the mother of ISIS and all terrorist groups. Saudi was the swing voter – supporting Egypt’s position during the reign of the late King Abdullah, and now moving to the other side under King Salman.

The current dance in Cairo, Riyadh and Istanbul is to realign these positions in line with the change in Saudi policy. And of course Qatar plays its favorite role of the mediator.

If this re-alignment takes place, expect the following (signs are already taking place):
– Egypt will allow some MB members to participate in the parliamentary elections. Postponing the elections gives the government time to internally negotiate the size of this participation
– egypt will release MB moderate leaders, and some youth and mid level cadres. But will keep senior leaders as a playing card at least until the deal is negotiated.
– Egyptian-Turkish relations will improve, although the personal animosity between Erdogan and Sisi will keep them from getting too close.
– Saudi and GCC economic support during the upcoming economic summit will be substantial.
– Support for the Egyptian military upgrading its weapon system will continue and grow.
– Don’t be surprised to hear of Egyptian troops at the Saudi borders with Yemen and possibly Iraq. Timing is a big question, but given the rapid deterioration in the Yemeni politics, it likely to happen sooner than later.
– If Qatar and Turkey are aligned, then things may cool down in Libya and a political solution may take place.

All of this is contingent on the success of Saudi in forging its anti-Iran Sunni alliance. Over the short term, Egypt will follow the Saudi’s as it needs their financial aid. However, the internal space given to the MB will likely remain symbolic.

Share this:

Like this:

“Mubarak’s regime is back, along with its security state and military rule” – a statement that I hear very often these days: from Mubarak loyalists “feloul” celebrating the victory of their “new” revolution against the previous one; from Muslim Brotherhood loyalists claiming the moral upper hand and trying to attract revolutionary youth back to their cause; and from revolutionary youth who are depressed by the current state of affairs. The reality is that the emerging regime is far from Mubarak’s regime, for several reasons:

Despite the crackdown on the MB, the new regime is not able to maintain full control over the whole population through the use of coercive force, and they know it. The only reason they are able to crackdown on the MB is that pretty much everyone else decided to let that happen. However, the government, this and any coming government, does not have enough coercive power to control 85 million people. Result: people power is real, and both sides understand it. If any coming government wants to survive, it needs to have and maintain this high level of popular support. This fundamental fact is the base for legitimacy of any regime.

The Police force learned a big lesson: their role in the political process is counter-productive, both to the Police as an institution, and to the country. Once the dust settles, I can see major revisions to the doctrine of the Police institution in Egypt that would keep them away from politics. However, they are likely to maintain their doctrinal enmity to the MB, which has remained through decades.

The military institution is also likely to revisit its role in the new regime. The experience of 2011/12 showed them clearly what to expect if they are perceived to side against the people, in terms of very rapid decline in popularity and serious challenges to their institutional power. The military will stay out of the political picture in any future regime; however, they will make sure they draw clear boundaries of what they control; they will also make sure they maintain tight control over strategic state institutions, albeit behind the scenes.

The new regime must take more populist economic and social positions. Revitalizing the economy is a priority, but growth must focus on job creation and equitable distribution of wealth. A new regime should understand the perils of crony capitalism and mixing politics with business.

Opening up of the media is likely to grow. Although the media has been almost state-controlled since 30/6, this is likely to loosen up. The growth in media channels and political diversity is likely to return and to continue to influence politics and public opinion. However, the new regime will ensure that the state has a strong presence in the media, and the tools to influence its direction and create clear boundaries.

A new generation of youth is likely to come to age and influence politics in deeper ways. The remnant politicians from the Mubarak and Morsi eras are mostly discredited or disabled. Most of them should disappear in the coming period, and new faces will evolve. Politics will be more aggressive, fragmented, and ugly, but it will also reflect the social scene. The old Mubarak-style domesticated political scene is unlikely to return.

Finally, the presence of the MB in the political and social scene will also change. It is hard to predict where they will end up after the current confrontations, but they will not be back to 2005 or 2011 or 2012. Once the new power equation has stabilized, there will be a new deal/arrangement between them and the regime that will define the sand box within which they will play. It is not clear yet what this arrangement will look like or how long it will take to reach them.

All of these changes have deep social, political and economic ramifications. We are in the early stages of understanding their implications and the features of the new regime that is likely to emerge. Egypt is at the formative stage of a new republic. It is still not clear what it will look like, but it is not a new incarnation of the old Mubarak’s regime.

If we step back to reflect on Egypt’s post-revolution transition… We should not be surprised to find how messy it is. It is actually happening Egyptian style: We will take all the wrong exits, open the wrong doors, make a lot of noise, take ten times the expected time; however, we will eventually end up in a good place!!! How so?

Up to, and right after Mubarak was deposed, the previous regime had a short window of opportunity to regain control. It failed.

Right after that and for 18 months, the military had a chance to govern. The result was as miserable. They lost their popularity, and drove the country into a wrong path. They also worked hard to deflate the revolutionary momentum. Their exit was to preserve whatever is left from their power and to save their leadership and interests.

Then Comes the Muslim Brotherhood with their century-old project. Their political and economic failure is becoming very eminent. The question that will be asked over the next six months is how to secure a safe exit for them, and what is the nature of the following regime.

It is unlikely that the revolutionary liberals will follow, mainly because of their lack of organization; however, they will play a significant role in shaping the next regime.

The real lesson learned is that a regime based on a single power is unlikely to be able to govern. The challenges are too immense; they can not be solved without the support of a broad-based alliance. The question is who will be able to lead the formation of such an alliance, and who will be part of it? Until that lesson is absorbed by all e players, and until they figure us a way to work together, the “transition” phase will continue.